francine: u.k. parliament votes by a majority of just one to block the chance of a no deal brexit. that as theresa may and jeremy corbyn hold initial talks german reports the decision on deutsche bank and a potential tie up come this weekend. to the ftc, unicredit is waiting in the wings. trump prepares to meet china's vice premier at the white house admits signs trade talks are edging towards a deal. ♪

francine: good morning, everyone, this is "bloomberg: surveillance." we are getting data out of germany the 2019 growth forecasts have been cut. to some and weng saw a similar stance from the imf. you see the europe stoxx 600 down 0.3% after a nice lift yesterday. is on trade,focus a lot of the focus will be on trump and vice premier. 1.3182.d at we know the jeremy corbyn has been speaking to theresa may, but that deadline still yields coming up on bloomberg: surveillance, more from anna botin, but first,

let's get straight to first word news. house democrats formally demanded president trump's tax returns. they have asked the irs to turn over six years of filings, setting the stage for a clash with the white house. however, the decision is up to the treasury department. millions of facebook records have been found on amazon cloud cybersecuritya firm found frozen of user information have been interim -- have been posted online. facebook allowed anyone making an app on their site to take his information, and more recently, has cracked down on the use of user data. carlos ghosn has been rearrested and allegations that he is millions of dollars of nissan's money for his own purchases. the former chairman has been free on bail for less than one month.

that she will not be broken. thatesia said -- has said indonesia's central bank has cut, a week before elections kickoff. cutrate was low and this lends to 50 basis points of tightening. for u.k.l deadline businesses to report the gender pay gap is approaching, the results show few signs of progress, but big names are saying the imbalance has gotten bigger. last year, the system unleash a wave of embarrassing information, highlighting that women are underrepresented in higher payrolls. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine. francine: thank you so much. we getting some news from nomura.

news from the banking sector, unicredit potentially eyeing commerzbank. now, we are finding out nomura jobsid to cut 100 ema mainly in credit. ison't know whether it relocation, but for the moment, that headlines crossing the terminal. cut hundredsd to of jobs mainly in ema. falling afterla we heard from tesla and we will have a full round of the tech stocks. parliament has voted to block a no deal brexit shortly before midnight. voted by a majority of just want to seek another extension from the eu and to rule out leaving. may and most conservatives oppose the legislation, which now goes to debate meanwhile, the two main andies intensified talks both sides described yesterday's

initial discussions as constructive. meetingnvited us to the , and i accepted the meeting to go there and set out our views. she put up the government's view of the whole thing depends on the withdrawal agreement as put forward at the present time. we are joined by the chief market strategist and ema at jpmorgan. always great to catch up. is takenean a no deal off the table, or could we still see it getting out? don't think we know have a zero possibility, but i have felt that a no deal has not been a significant possibility. what is clear is that there is only a handful of mps who feel that no deal is a viable proposition. of the 650 mpsty

want something that is a deal, and if not the prime minister's deal, something else. there has always been the legislative framework to prevent that handful getting their way. i have never felt that was a significant risk, they should never have zero probability. francine: because we don't know what the eu side will do. althoughat's right, what we have learned over the last three weeks is not only ,ave the first u.k. parliament but first, however inverse the eu is to the no deal. the impact of economies on both sides. both are constructively working on the deadlines and timelines. i think both sides are equally vested in moving forward, the question of course still is exactly how quickly. a longe: if there is

extension, does that automatically mean a softer brexit? my view from the outset has been that there are two realities. one is that there is a border, no way around that. and also, our supply chain with the eu is highly integrated. therefore, what ends up in brexit has to be founded on a customs union. that is the only solution for both of those two realities. what we have been moving towards is the clear realization of that across the house. that is what jeremy corbyn and the prime minister are talking about, this common ground we are moving toward. i think that is the direction of travel. forourse, it is difficult the prime minister because a customs union means we did not regain. to. -- full sovereignty. we do not have full trade policy, and it is certainly, as

it is pleasing a number of them. it is difficult to move forward, but i think she has clearly gotten to the point where she has tried to provide a solution for her party, has been unable to come and is rightly moving towards something that can. i think that we will see that in the next week or so. francine: what does that mean for investment? karen: it means that at the end game, it is a softer brexit. something that maintains a close relationship with the eu. it means that is good for u.k. assets. we have nothing that fully repriced. we still see domestically facing stocks relatively beaten up sterling is still not doing a lot in this narrow trading range. i think it has hired to go. i would not say, however, there will necessarily be volatility in the interim. in negotiations, you generally

need a midnight hour and a pain point. and i don't think we have actually gotten to that point. francine: pains in terms of sterling or intense negotiations? karen: both. [laughter] both, i think. we're still in a game of brinksmanship, still in a game of meeting certain concessions. whether that is a conservative backed bench or this cross party consensus. and it may require a little more up against the clock kind of pressure and that uncertainty means markets suffer in the interim. if you can stomach the volatility, and absolutely there are opportunities, but i am mindful of that volatility. francine: thank you very much very much, ward -- karen ward, jpmorgan. watched it is giving beijing extra time to fulfill its pledges. we talk trade next. this is bloomberg. ♪

>> provided by the manufacturer

but were not able to control. francine: we have been following those crashes from the boeing 737 and we are now just hearing from ethiopia briefing reporters on the grounds they found the a couple weeks ago and ethiopia is now saying the pilots followed all the procedures and that the crashed airline had a valid certificate to fly. course, we'll fall this closely, and i think one of the main prosecutors or spokespeople for the government briefing them on the ground, there will be a lot of people wanted to know exactly what happened. at least the victims of the family. also, commercial interest including boeing. will keep an eye on any headlines coming out of that news conference. in the meantime, let's get a business flash. is reportedly seeking $50 billion for its already massive tech fund.

they have invested more than 70 billion in the tech companies and bloomberg has learned there -- talks of an effort to assemble a second fund. raising $100 billion every two or three years. reported a record decline in deliveries, part of it is due to shrinking tax incentives. in europe and china, the company struggled to get cars to customers. it is a setback for elon musk plans to accelerate sales with lower prices. shares are falling in premarket trade. reportedly talking about a rival bid. the move would come as merger talks between the lender. the crosstown time as the mounting opposition in recent weeks. they can merge with a german lender already owned by unicredit. this letter is targeting 100

billion. the brokerage says they plan to exit from high-yield bonds. the tokyo firm has been grappling with how to handle the sluggish economy. mainstay business has dropped 44 straight quarters -- for four straight quarters. francine: president trump will meet the chinese vice premier insides the trade talks are headed toward a deal and larry kudlow says they are making good headway. up inan companies headed optimism on a successful outcome. morgan is from jp still with us. karen, what is priced in? the good newsf has already been priced in and the devil will be in the details. whether it includes tariffs being reversed, whether the threat of higher tariffs is a limited entirely.

and we how broad ranging the deal is, my concern is that there have always been three areas of contention. one is tariffs, one is intellectual property, but the third is how each country treats it. and the u.s. contention that the statement subsidies in china provides it with an unfair competitive advantage. that is where i don't believe that will be brought grounds for consensus. francine: let me jump in for a second, because we are following this news conference. is transport minister briefing us on the airlines crash. minister,e transport and she has just said that ethiopian airlines recommend aircraft control systems. member, if you look at the controversy that followed the crash, it was about some of the sensors that would make the plane go down right windows

taking off. i feel significant. they recommend played control systems. you any news, some of the press gathered in the capital. then, we will see if boeing response to it. there was an internal investigation by the u.s. aircraft carrier. we are talking about how comprehensive or not the deal could be. this is the deal we are asking on our live blog. if you are a customer, type mliv , and this is what we are asking. how far can stocks rise if there is a trade deal? karen: probably to the upside. until were saying, something is absolutely side, there's still going to be some risk.

there is scope for disappointment on how broad ranging. in other words, if this trade war goes to simmer, but stays on ander, it does not go away i don't think that solves a lot of our problems. what the trade war is doing is causing companies to stop spending, that is why we have seen the industrial turndown we have seen. for all the while, it is on , we will have corporate's remaining hesitant and limiting growth. francine: does it affect technology stocks? when you look at, for example, theeffect of huawei, american carriers don't have any in their technology, whereas in europe, it is difficult to build five cheat without them. there is aare right,

lot of complexity. but the overarching issue is that both want to be the global dominant player. the u.s. wants to protect its industry and the chinese want to support its growing tech industry. so it is a sort of country clash. as you say, this micro detail is important for investors as well. francine: would move currencies? karen: the one thing that has it doestled is that seem within the negotiations there has been an agreement on maintaining some kind of stability. there are major implications there, i think there are broader implications for the dollar in terms of the outcome and whether it is , andrted for global growth therefore, on a broad dollar weakness story. but i don't think it is a dollar-yuan story. francine: thank you very much. n ward from jp morgan stays with us.

carlos ghosn vows he will not be broken amidst a recent allegations. we get the latest on that drama next. this is bloomberg. ♪

foreign language}

francine: that is the european minister saying they do learn more about the ethiopian crash. we've opened up new details into the probe that indicated the pilots disabled the safety system driving down the nose, yet still crashed. that only deepens the mystery of what happened and was according to our very own bloomberg reporting. despite the pilots and former investigators, and now the news conference is still going on in the ethiopian capital. ethiopia is now recommending that boeing reviews is flight control system. let's get our expert on this, he has been following this from the very beginning. what does this mean? we found out the pilots a, or train for this, were able to disable it,, and still crashed.

what is being indicated, that the train procedure put in place by boeing was insufficient. at the pilots on the plane did exactly what they were told to do. still, the plane richard the system and pointed the nose down. we hear it from ethiopian and the faa and basically, the recommendation now is that boeing review the system that points the nose down. as well as require aviation authorities to prove the system is in fact working. francine: yesterday, you are telling me that the sensor is possibly to blame. the sensor was also repaired at another facility. to a note that the sensor was the problem? they havenot -- >>

not given us information on the senate -- sensor. it suggests that the focus is on the automated system placed on the nose. how the sensor may have been affected in the flight, there have been reports about potential bird strikes or weather conditions. is the focus at the moment entirely on the software update that boeing is going to have to roll out. francine: thank you so much. we're just trying to keep up-to-date with exactly what happened. as another person who is familiar also told us overnight, but maybe the pilots not perform critical parts of the checklist. will bring you any headlines. this is bloomberg. ♪

francine: economics, finance, politics. this is bloomberg surveillance i'm francine lacqua in london. today is the deadline for businesses to report gender pay

gap details. there are signs of progress and in some cases, the imbalance has gotten worse. how are companies actually faring? whole, men are being paid more than women. broadly speaking from 2017 to 2018, it is the second year that companies had to disclose this information. the average and median pay gap relatively the same. but one unit that was white and was bonuses. gapses are now 15%, the being paid more than women. if we look at ftse 100 companies to see how they fared, only a of women are being paid more than men. units,re health services and if we look across how many women are being paid less than

men, you can see that it is really a sea of red. anglo american, to erase -- tui airways. a lot of this data shows the embarrassment of these disparities but companies are saying that they are making changes but it takes a bit of time. thecine: thanks so much, gender pay gap amongst companies. ask is free to the bloomberg first word news. get to the-- let's bloomberg first word news. despiten: the move theresa may softening and working with job -- opposition jeremy corbyn. the bill won by a single vote it will move to the next chamber of parliament. fulfilling trade pledges as the

move event economies closer. it allows president trump and xi to sign a deal. they are set to meet at the white house today. the trump administration is reporting examining options for shuffling entry points at mexico. this is following through with the threat to close the border. inparations are somewhere theoretical discussion and implementation planning. says he will attack his style to changing sexual norms. this is after reports of making women uncomfortable. he did not apologize but says that he needs to be respectful of personal space. day andews 24 hours a on tictoc on twitter.

powered by 2700 journalists and 120 countries. the tie up between germany's two biggest banks, if that fails, the italian lenders are preparing a rival for commerzbank. akin february, the deutsche bank chief financial officer said consolidation in the european be sensibleor would for a variety of reasons. mergers and, consolidation in the european banking sector would be sensible for a variety of reasons. with that.agree what form it takes and how long it takes to do is anybody's guess at this point in time. joining us from rome is russ larson. would a bid for commerzbank be strategy? with their

we'll may have the financial times view that this is going on. we have talked to a lot of and it isthe know wildly inconsistent with their strategies. it does sound like something that is possible for them to consider. chartave a really good and i want to show everyone. unicredit ishat more valuable than commerzbank and deutsche bank. .ut unicredit has bad debt what sort of shape is unicredit in yucca -- unicredit in? >> they have a long way to go. but it could be said that unicredit along with another are the two most successful turnarounds in the larger banks in italy. they have done a huge amount of

cleanup, they raised 13 billion ,uros to help back it up selling off bad loans. the shares were very depressed and a lot of that is on the political and economic situation much more than the performance of the banks individually. francine: let's welcome the head of multi-assets at royal london. for arriving and sticking around. banks,u look at european there are rumors about consolidation. aboutls like it is more nationality then hard financials . i was speaking to a spanish economist and one of the challenges is trying to get the national banks with less of

the national sovereigns. and the widening of spreads, there has been a bit of a biased strike. it is hard to break the in the sovereign euro area where they are trying to do that. francine: do you like european banks? the negative yields. they have quite a bit to contend with. >> we're sort of underweight european equities generally. banks are real bellwether for the market. at the moment, it is quite hard to disentangle the difficulties the banks are happening.

we're seeing a lot of disruption in the u.k. data to deal with brexit stress. my suspicion is that european equities and u.k. equities are all under a bit of a cloud here. and we could see a bit of the snapback. >> i will add something that i think he is absolutely right to draw that link between the economy, the ecb, interest rate, and the outlook for the banks. i would put something at the start of that, the chinese stimulus. how big is the chinese stimulus going to be? and on consolidation, it does seem highly likely. there is virtually no sector were this is not a story of disruption, picking the winners and make sure you're not holding the losers. and you have chief executives from banks blaming

what ecb policy is doing. it would be easier to whether that. >> i have some theories. the banks and parts of the eurozone where interest rates fell too high, you have kind of a lot of legacy effects of the financial crisis and euro crisis. francine: that is karen ward and greetham.et him -- we are getting breaking news from ethiopia. the investigators say the plane was not damaged by a foreign object. this was one of the possibilities they are looking into. this is on the back of the black box having been found and we are briefed by them cats about what could've happened with ethiopia.

more and more reports are calling for a board to review some of the things used in the 737 max. we will have plenty more on that next. this is bloomberg. ♪

this is bloomberg surveillance. i'm francine lacqua in london. it's get more on brexit and the view from ireland. the prime minister will be in dublin today and discussing plans for a no deal brexit. lawmakers voted by the narrowest of margins to force the government to request a delay to the eu exit process. maintainingid to be

an open border with a north in the event of a no deal brexit. to a bloomberg source, the commission will seek evidence of a plan to deal with a plan along the border. joining us is neil richmond, irish senator and from the royal london asset management. thank you for joining us. is there still a real danger of a new deal brexit gekko -- brexit? extension, get the it is very much alive threat. need to see prime minister may come to the european council meeting next week with a real plan for an extension if that's what she requires. discussions, it has to be tangible. hopefully we can agree on that next wednesday our next friday. -- one next friday.

-- or next friday. francine: is ireland prepared for a new deal brexit? deals that very much complements the notice is published by the european commission. but it is base legislation. it covers several things like health care, allowing buses and trains to continue to cross the border to make sure that people can get reimbursement and protect people in british companies. it is nothing as good as what we have at the moment. nore is a bit of a myth that deal means no change but it would be very drastic changes. every eu member station would be directed -- affected differently by the no deal. that is why preparations have been different. there is simply no such thing as a good brexit. francine: so we have been

briefed according to diplomats that brussels will allow an open border in the event of a no deal. is that also your understanding? we're working with commission officials and member states to solve the conundrum of both protecting the open border which is at the bedrock of the international peace treaty as up as afully paying member of the single market. found in the 18 months to two years is that the best way to achieve that is with a deep and meaningful trade, customs, and regulatory relationship that is allowed for. something that is backed up by the insurance. but if we are in a crash scenario, those things become increasingly difficult. for a hardlanning

border but there is nothing confirmed yet between any discussions. premature at this stage. we look forward to working with chancellor merkel in a couple of hours. francine: when you talk about premature, it seems like the deadline is seven days from now and this would be next friday. is this what brussels is leaning towards? keeping an open border in the event of a no deal? >> we very much open can keep the border open and we intend to. we have to make sure it is compatible with keeping the protection of the single market. the were you achieve that is with the regulatory alignment of northern ireland and the rest of the european union. that is the best way to go forward. it is a very soft touch. touch ate a very soft

the moment. we have not squared this circle completely yet. we are a bit away from it. and we don't want to undermined the ramification process and anything that might happen after friday. we very much think the no deal is a lot less likely and we hope we can work positively over the coming days. do you thinkt happens on day one or the day after the possible no deal? this could happen april 13. >> it could've happened on march 30 as well that we were able to avert that. there is no precedent. no one has ever left the european union before. and not only is a very large member state leaving the european union, but it has a commitment under an international peace treaty. there is no playbook for this. since muchn working happento see what could

to the irish border post-brexit. we know what the worst case scenario would be in terms of the customs checks and we're desperate to avoid this as our the european partners. how do we resolve it? the one thing we have to leaves, is if the u.k. without any of the legal guarantees or the single market, they are so important. and anything achieved under a no deal scenario might be long-term sustainable and might require the u.k. to come back to the table very quickly. ratified in to be the mind of the treaty. to being atforward the european council meeting for a clear path of where we're going forward in the process. francine: neil richmond, ireland

senator and brexit committee chair. we will try to catch up with him over the course of the week. when you look at brexit and the probabilities, what sort of probabilities are attached to the no deal brexit. and how do you position yourself in the markets? it will be a difficult week? >> the markets have taken some comfort over the noise that no deal brexit is less likely. sterling strengthened a little bit in the last few weeks. the markets can't rule out a no deal brexit. if you don't make a deal and you don't get a guaranteed extension, then it can happen. the markets are not ruling out no brexit because we are -- it is possible we end up in a situation where we get a large

extension and we need to actually ask for a second referendum on the final deal. and that is very much up in the air the next couple of days. francine: stay with us. up next, millions of facebook users records happen found hiding in plain sight, stored on the pound. -- on the cloud. this is bloomberg. ♪

economics, finance, politics. this is bloomberg surveillance. i'm francine lacqua in london. this is what is moving in london. >> coming back from dropping 10% at the start of trading this morning, this is as drilling gets spun off today in the markets. now slightly higher. commerzbank to the upside, nearly 3%. is raising it hand and potentially interested in an acquisition of commerzbank if deutsche bank falter. and saga limited falling 30%. they cut the dividend, a profit

warning and some write-downs. now let's bring you a little bit more news on the markets that you should be watching out for and what we should be really worried about. let's get back to trevor. you look at the yield curve and a little bit of negative yields in germany. but what are you really worried about out there? >> what we need to see our signs of the world economy. every economy in the world has been slowing down this year and we see the big increase in stock market volatility. see the fed go on hold, we see the china stimulus program and looking for signs of some kind of pickup in growth in the near term. this is in the context of a business cycle. the yield curve is inverting. there could be a burst of growth later in the year. the fed raises rates and in response to it -- raises rates

in response to a. so much, we saw it forget the yield curve. it doesn't do anything in the economy. but now we are hearing there. >> we track investor sentiment really closely and in the fourth quarter of the year, we ortralized that in november december. we were selling february because that is when you see the pendulum swing the other way. people were not really optimistic or pessimistic. it was a wait and see attitude. he see more improvements like the china pmi. we could find ourselves buying selloff.ts it would stimulate the chinese to step up the activities. there is a positive tone to markets. there is a longer-term out there

that we are relating to the cycle. francine: which means what? a possible recession moving? but at theeps ahead, moment, we're focused on -- francine: anything could happen in 12 months. >> if there is a recovery, we are expecting a recovery. use that to get your house in order. lendingike peer-to-peer and some of the funky stuff, it is a good opportunity to ship some of that stuff out. francine: do you go for sectors or regions? >> our biggest bet is to be neutral on brexit risk. francine: brave call. is there a chance for no deal brexit? >> i think there is a higher likelihood of no brexit. if you want to get a really big , if you in the commons

to may'sreferendum deal or corbyn's deal, you will get there. jeremy corbyn's brexit is may.ally the same as they have a similar view and neither of them can get a big majority without attaching the referendum. joining us later today, we will have plenty more on the banks. we will be speaking to chief executives and talk about markets, brexit, and commerzbank. this is bloomberg. ♪

deal.ne: no to no

the u.k. parliament votes by a majority of just want to block any chance of a no deal brexit after theresa may and opposition leader jeremy corbyn hold initial talks. the fate of the merger, a german report says the fate of the commerzbank and deutsche bank tie up, unicredit is waiting in the wings if the deal falls through. and trade optimism, president trump plans to meet the chinese vice premier, signs that they are edging towards a deal. good morning, everyone. good afternoon if you are watching from asia. , onent francine from london our way to turn lbo, not chernobyl. i just want to go in one of the fancy wooden boats. francine: we will talk about economics in the political situation and how this all folds it to brexit. the idea of brexit,

discrete and separate. i know it is jeremy corbyn and theresa may in the papers. but the effect to italy and the rest of the world, that will be wonderful. francine: and we will talk about italian banks, unicredit standing by in case commerzbank and deutsche bank don't merge. april and mary report on the crash of the boeing 737 max says the crews did what it could to try to prevent the disaster. the government says the pilots followed the emergency procedures that boeing recommended. investigators urge the company to work on the plan control system. lawmakers have backed prevent a disorderly departure from the european union. they managed to block the

potentially damaging no deal brexit. jeremy corbyn's opposition labor party will be in talks. and there is a sign that trade talks between the u.s. and china may still be in the final stages. president trump today with vice to agree on core issues that would allow the president and chinese leader to hold a signing ceremony. and in japan, carlos ghosn has been arrested again. prosecutors accuse him of misusing millions of dollars. alice cohen calls his arrest arbitrary. -- carlos ghosn calls his arrest arbitrary. 24 hours a day on air and onto talk on twitter powered by more than 2700 journalists and analysts in more than 120 countries. let's go to the equities

bonds currencies commodities right now. i will call it quiet. much a pause here on terrific equity performance with a two or three day advance. any idea of the vix within this bull market, 14.87. this is a number that is hard to digest for the bears right now. 3% is the benchmark. and all of that low yield 92% on thewo point 30 year bond. the turkish lira with their idiosyncratic ways. what i'm this is looking at, a little bit of the tie up at unicredit. commerce bank not actually merge with deutsche bank. -- commerzbank may not actually

merge. in a little bit of momentum despite president trump meeting with the vice premier of china. gold recovering a little bit of ground. investors are looking at brexit. it is great because we have our brexit leader looking at the ramifications of this shortly. steady despitely german factory orders. that was suggest the data is a big deal. the u.k. parliament has moved to rock a no deal brexit. lawmakers sought to seek another extension. it passed by just one vote. theresa may and most conservatives opposed the emergency legislation that now those for debate. joining us now is the european head of global markets research. isomberg brexit editor following the news in

parliament. brief us about the possibility of a no deal. >> the chances have diminished massively. likely that it will go through in the house of lords. what this means is we are faced may's dealtions of and whatever she comes up of jeremy corbyn. probably quite a long delay and this idea of a general election is still stalking around. hopping madable was last night. it was furious not only because of the way this thing was rushed but the reason they are so mad is that their favorite option is taken off the table. it is hard to know what they will fight for now. -- francine: if theresa may

and jeremy corbyn are talking, and it is going well, will she offer general elections? otherwise, why would jeremy corbyn do it? >> jeremy corbyn is more pro-brexit than the rest of his party. there is a strong argument to say that he would like brexit to be done. it, so much the better. the government is in a real hurry to get this done because they don't want european elections. they both came out of the talks and said it was constructive. he doesn't seem to be in much of a hurry. one of the more important things cox, the geoffrey attorney general and a

-- he said if we have a customs union, so be it. i just want to leave. it looks like she is inching towards some kind of customs union. if you look carefully at the deal, you do spy a customs union already. that heorbyn has said wants it with add-ons. they don't start off terribly far apart. that will be the thing to watch over the next few days, whatever the languages around that. audience, going to a bunch of fancy economists, this entire song and dance is displayed by king and carney. you don't agree on what happens if there is no deal.

that is the polarity that describes the entire debate. with all of your work and all of our bloomberg staff, what will happen if there is no deal? king and carney don't agree. >> there is the short versus the long-term. months ago, we painted a picture of armageddon. both sides have done stuff on things like financial markets, infrastructure. and it is just true that the two .ides have agreed agreed to keep them flying. is that you can't avoid there will be logjams. britain is an island and most of the food comes in through dover.

there is no way that you will avoid any kind of disruption. down and i have to figure out how to pay for it. that way i can buy something appropriate? just covered the sterling forecasts. even though i would agree with the concept of moving toward something that is a softer brexit. envisage difficult to a scenario in which the markets believe we are going to have .his kind of moment >> where are you? >> we still think the pound will strengthen. the bigger story is moving towards a softer brexit. -- open ae and pandora's box of uncertainty. general election

scenario, the markets will be asking the very obvious simple question. so we're never going to be in a situation this year unless may's deal goes through which we still have to say as possible. possible. beyond that, there is a realm of uncertainty. tom: we looked down at the queen victoria street studios and it ,s snow in the beautiful spring april day in britain. that can explain all of brexit. in charge of all of the brexit coverage, thank you for being with us as well. not only on the european experiment to strengthen germany , the future for all of europe. note on the terse american economy. look for that in our next hour.

francine lacqua and tom keene. this is bloomberg. ♪

is bloombergis surveillance. with a new twist in the merger talks between deutsche bank and rival commerzbank, unit --

unicredit is preparing a bid. germany would prefer a cross-border deal if the merger doesn't happen. it is the second-biggest u.s. ipo of the year. raising $1.1 billion. , they above the market increased the number of shares it was selling. the stock began trading today on the nasdaq. and japan's number of holdings has planned to cut $1 billion of cost. have already begun at the country's largest securities business. have beenjobs eliminated in europe, the middle east, and africa. lostde of japan, they money for four straight quarters. trump willresident be meeting the vice premier later as a sign the trade talks are edging toward a deal.

negotiators says are making good headway. a sixquities edging up to month high yesterday on optimism of the successful outcome. -- [indiscernible] thank you both for joining us. move do have a deal, do we on the back of it or is everything priced in? >> a think a lot of it is priced in. isto 27%, i think that partly on optimism that trade will get done over the last 10 days or so. from washington and beijing, we are told they are close to a deal. in large part, it is priced. but we're starting to get the emergence of some good, positive data. i'm not convinced that is fully priced because we haven't had much evidence of that yet. the stimulus measures that have

been implemented over much of the second half of last year in announced, that appears to be hitting the economy. short-term, we could see some for the strength. francine: how much does china need this deal? >> very much. not so much for the economy. short-term it needs it to boost the economy but the really big price for the chinese is access to u.s. tech. if we get a deal and it looks likely that we will get some kind of a deal, this is happily ever after. these decisions will come and go during and after trump. tom: i don't see any trust from paragraph seven on down. trust in theevelop next 24 hours or in the next 24 years? >> i don't think they do. they develop a deal that is workable. they can both trot out a press moment and everything is

great. it is a tangible deal. how can you do that? >> there are things the u.s. wants like better ip protection, better access for firms into the chinese market. there are lots of people in china that are pushing for it. it is the implementation measures were trump is getting delayed. jinping the chinese president -- >> he is more desperate than the president of the united states to get a win? >> he needs the tariffs to be removed. the u.s. wants to leave tariffs in place just in case. i think structurally, there are two main issues here. one is china's industrial policies. even if the name goes away, that is china's future economic trajectory.

again, it is not going to go away. francine: does that move the dollar? >> again, we talk about a real deal versus a deal in name only and it comes down to the details of the deal. in terms of your question about trust, probably from a market perspective, the most important element are the enforcement measures. if china agrees to some element of unilateral enforcement by the u.s. which is what they are resisting at the moment -- in awhy should any nation bilateral negotiation affect unilateral effort by the other party? >> it would have to be very specifically laid out. i agree. it we may not get that. and therefore, there could be a deal in name only. saidback to what i short-term, there could be some enthusiasm if something is signed.

going beyond that trust starts to fall away, which is possible if it is a deal in name only. will ip theft be thoroughly addressed? .> a think it will be depending on the perspective. the chinese are innovating. they want ip as well. i think it will be more than in name only, but will it last two years before it starts pulling at the seams? we get a lot of measures that help. thank you so much. greatly appreciated. away.tory will not go please stay with us. there is a lot going on today. have futures a little bit red on the screen as well. from our studios in london and in the dark and stormy prime

minister head of labor day in london, this is bloomberg. ♪

is bloombergs surveillance. tom and francine from london and then we will be on our way to italy later this afternoon to bring you economic coverage of the forum. that's the story of the ethiopian crash that killed everyone on board. investigators concluded the pilot followed all the safety

procedures laid out by boeing. the transportation minister said the playmaker should review -- thee maker should review report and boeing has confirmed it is viewing the report. we are following the news conference together in the next hour or so. we are implicating the automation part? right? outhat ethiopia is coming and saying is that the pilots are not at fault. and that is really the main takeaway. it implies that they were given instruction from boeing following the indonesian crash that came five months earlier. and followed that procedure they were still unable to avert the disaster. it raises a bunch of questions about what did boeing do in response to indonesia?

what was the fallout from that? and there is a question about if boeing understands the issues. i want to ask two questions on your authority that is tangential to the heartbreaking news from ethiopia today. is it any indication in the boeing system that this is outside of the 737 max 8? is the still a discrete study or is it a question of trust with the rest of their commercial platform? is the max at this stage. the development of the max was ushered in. you know, the airbus competitor. because of adjustments, they had to put the engine slightly forward. fixthey had to essentially the issue. tom: what is next within this

investigation? are waiting from boeing to see if they agree with everything authorities are come down to will the patch that they are supposed to be issuing in the coming weeks. but it could still be months before we see the planes back in the air again. tom: coming up, really looking forward to this. roger from capital economics. on the complete history made by the hour in this parliament. please stay with us from london. this is bloomberg. ♪ want more from your entertainment experience?

just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should.

just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. ♪ francine: this is bloomberg "surveillance," tom and francine from london. let's get straight to the bloomberg first word news. viviana: a u.s.-china trade --

sebastian: a u.s.-china trade deal would give the u.s. until 2025 and would allow american companies to completely own businesses in china. president trump and liu he will meet today, a sign talks are in their final stages. demanded have formally the irs turned over years of president trump's business and personal tax returns. it is almost certain to end up in court. to diffuse atrying problem that could hurt his presidential hope, that he has made women uncomfortable. he did not apologize but found to change his style -- vowed to change his style. the man accused of the mosque massacres will be in court. the attack prompted new

zealand's government to ban military style assault rifles. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am sebastian salek and this is bloomberg. francine: thank you so much. we are getting some news out of italy. we understand it will cut its 20.1%dp growth forecast percent.o 0.1 this is significant because if you cast yourself back a couple weeks ago where you have an uneasy coalition inevitably, they tried to come up with a budget that fulfilled campaign promises on both sides and that relied on italy growing so if it , the tax cutss they promised and some things they promised to their voters.

talk to me about the level of stress on euro because of germany, italy, and other countries. derek: the news has been pretty grim, particularly the german data this morning was horrible, down 2.4% on german orders which was a slight increase. way off consensus. .he growth is still very weak when we are talking fx, we talk relative changes in the relative cyclical support of the dollar pretty much has not changed. we have had a monumental shift by the fed accompanied by weak data. perspective,ve that is taking away the impetus for selling below the key level of 1.12. francine: what do we need to grow, what reforms or fiscal

spending? derek: a bit of both, for sure. just simple government spending itself that adds to the deficit is not the answer so there has to be structural reform, a simplification of the italian tax system, something along those lines would be more beneficial. given the level of debt in italy, implementing anything when you have the political instability we have had is very difficult. tom: how are they burdened with the euro at 1.12, 1.13. germany can afford a strong euro. does italy desperately need euro-dollar parity? derek: i do not think what we are seeing in europe is fx related. it is final demand related and in particular, the extent of slowdown in china in the second half of the year. tom: don't you agree that it is

global and net imports and exports? these domestic economies are actually pretty good, it is just the external shocks? derek: one of the interesting stats that has come out since the services pmi from germany asterday which picked up little bit. manufacturing, it is the greatest. tom: is it because of mr. trump? derek: the trade element is certainly part of it and final demand as part of it, but we should not free gas on the domestic stories. the labor market proves stronger than expected. wages are at the highest level since 2008 and we are having that fiscal stimulus in europe, the largest since the financial crisis. tom: derek halpenny with us.

this is enjoyable. we will be in ed lee tomorrow with an important conversation. here -- in italy tomorrow with an important conversation. i went to john mickelthwait and said, i must see the first game in their new stadium, so mickelthwait greenlighted my trip to london. let's start with that. the world is coming to an end. and yet, here is an infrastructure project that was put on and everybody has executed brilliantly. one day after brexit in our old studios, ubs bought a building instead of least a building. the city in london is actually doing pretty well. derek: it is doing ok. is it doing as well as if that

had not have happened? banks.der around the they would be putting more people in london but for brexit, and there is an element of holding back investments. the fact that -- francine: is all we need to know. hit --ow it is time to john: now it is time to hit. tom: every single cab driver london has the colors. francine: some of the players, germany and italy, italy cut its 2019 gdp growth forecast. how badly will it get in the euro zone? worried. germany is maybe a year or two

, it is in trouble. you have deutsche bank and commerzbank merger, that will be jobs lost. the auto industry could be hundreds of thousands of jobs lost. no reforms for 10 years, and this problem of the germans not understanding why the euro zone has been so good to them. no deal with macron, so no sense that europe will get integrated, and now you have italy. germany is meant to be the strong person. france has not moved as much as people hoped and italy has its own problems. even those on the remain side of the heatent in brexit, underemainers could come if the euro zone is doing badly

and -- is quite interesting. francine: you had a 30 minute conversation with the chancellor. what does she want brexit to be? is she do whatever she can to keep the u.k. close to the e.u.? john: she did not say much on stage, but from the noises around her, she does not want germany to be blamed for this in any way. keeping herself out of it is a big thing. generally from that group of germans in the middle, there is a sense that losing britain is a big deal, a much bigger deal than in france. the germans have always been able to hide behind the british on economic stuff. chancellor, ane extremely important moment for her. i had an emotional interview yesterday with the former supreme commander. view ofmickelthwait's

the state of nato and the linkage of england to germany? john: nato is in a strange -- a paradox. drum is being tough on it. various -- trump is being tough on it. various people are not spending enough on defense but nato is doing a lot. tom: can they wait out donald trump? john: i think they can, but it is hard. germany pledged to increase its merkel spending, promised that, but her finance minister came up with a plan to spend less. will because of putin, always have a raison d'etre in eastern europe. that is exactly the same time as trump is trying to undermine it. francine: from football to defense spending, we have all

angles covered. mickelthwait, bloomberg editor-in-chief stays with us and so does derek halpenny. we will talk about sterling and brexit. coming up, a conversation with ,he u.k. ambassador to the u.s. 11:00 a.m. in new york, 4:00 p.m. in london. ♪

♪ bloomberg "surveillance," from our studios in london. beorrow, francine and i will at an important economic conference, really looking forward to the conversation in the voices as we see the global

economy and the turmoil with the italian gdp numbers. a morning must-read from one of , thereseest writers raffaella is with bloomberg opinion and thrilled she could write this up. to seek an extension from brussels -- i guess that is the idea. 27 e.u.proved by states, good luck. the overture to corbyn was desperate and clever. i associatea word with john mickelthwait. a common ground mustn't be overstated. they are like two climbers who need each other to reach the summit, but who know there's only oxygen for one to make it down alive. [laughter] john: the performance review has gone up.

i think that is entirely accurate. her and corbyn, imagine the dynamic. they set opposite each other and barely talked after all this time. they do not like each other. one wants a general election to depose the other and they are stuck. francine: does theresa may need to offer him a general election? john: the real question is referendum. she can never agree to a general election. the question in the back, there is sort of an agreement around the customs union or the possibility. the difficulty is you put whatever brexit deal to a vote of the people, which has one attraction to both of them, they can blame it on someone else. for her, her priority i have seen is trying to keep the tory party together, and maybe she has deserted that. that is what she wakes up every

morning and thinks about. tom: i want to give you a mickelthwait question and this goes back to the nostalgia, both labour and conservative. 1843 and the founding of a magazine, as this nation drowning in nostalgia? economist,"s "the by the way. tom: hadn't heard of it. francine: are you talking about a parliamentary procedure? tom: i am talking about the wacko nation i observed. are we drowning in nostalgia? derek: this is unbelievable, unprecedented, particularly the speed of what took place last night. tom: is it the speed of information? is that they are trying to do a parliamentary ballet within the modern speed of information? derek: this is about a deadline.

we have had two and a half years and the 12th of april -- it is moving away from that, but up until the legislation that is newly about to go through, we are still at the 12 of april as being the cliffs edge of no deal. we are two and a half, nearly three years in. john: the british have become more european. the whole tradition of the european union, long discussions about things and at the last minute have the most almighty panic and somehow the cam gets kicked down the road. the idea of passing a bill in a day would have seemed very un-pragmatic and un-british. now it just seems like a tragic comedy. for ane: if the u.k. asks nine month or 12 month extension , doesn't water down the possibility of brexit? john: it does water it down. my guess is it still happens,

but it opens the door wider to those who want a second vote. derek: it is the vote that is getting the most support, 280 in the second round. where we are not a million miles from that being the resolution to this whole thing. francine: we do not ask ourselves what the e.u. wants in return. what will the e.u. ask? derek: the e.u. wants the u.k. to stay. an extension to the end of the year for that prospect to unfold versus a customs union, perhaps. tom: i want to get this in. to me it is so much the elites of a given city, the elites of london against the people of the united kingdom. i may be wrong about that. we were making jokes about football. it was like jon ferro talking

about the cop at liverpool instead of the rest of the $2000 tickets. is it that much, the elite against the rest of the united kingdom? john: that is the way the brexiteers want to portray it. they are partly right, to the extent that you look at most of the people who support remain are from london and scotland and wales and northern ireland. it is not difficult if you are sitting in a northern city on the english countryside to see a stitch up by a group of people mainly from the elite who want to either have a softer brexit or no brexit at all. that narrative will be a huge deal. if britain is part of the european elections, the brexit part will drive bad. people are cross about this because a portion of them did vote for brexit thinking, we will take no deal.

the other ones who arguably were sold something but did not exist, they feel cross, they thought this was done and now they have been thwarted. francine: is there bias on the market? the markets never really believed about the possibility of a no deal brexit, which could happen by mistake, because the money managers were per remain. -- pro remain. shows the reaction of fx the risk of no deal was not a huge surprise. we have cut our sterling forecasts, even though we think we are moving toward a softer brexit. the pandora box is whether a second referendum or potentially a general election, a whole host of stuff lies away -- ahead. brexit is not going away, so anyone who has a sharp appreciation of the pound. .ohn: a very weird imbalance

the political analysts all thought no deal is a real possibility. the markets are on the others in the markets have been more right. tom: derek halpenny, thank you for joining us, particularly with that sterling valuation. mr. mickelthwait will stay with us. moore,up later, stephen president trump's presumed board nominee at 2:00 p.m. this is a most timely interview off the discussion of mr. powell yesterday. this is bloomberg. ♪

♪ this is bloomberg "surveillance," tom and francine from london today and then we make our way to italy. projections of gdp have gone back -- down. toack-to-back interest cut support the economy a week before national elections. india to more on

harsha subramanian. still with us is john mickelthwait. when you look at india and the votes, some of our investigations point to the fact there could be a rejection of the establishment political class. how true is that? harsha: it is an interesting situation we are in. there is the story of the economy where there is a serious debate on the jobs in this country and there is another equation where the data on growth is being questioned. cut interestey rates and the inflation forecast. 7.2%.e growth forecast by whichever political party comes to power, they will be faced with a slowing economy and a serious jobs crisis.

two factors in the decision today. stands andsey inflation has -- is constantly under target and the economy is slowing down. prime minister modi came on the promise of creating 10 million jobs a year. private investment has not taken off. they are of the view that interest rates have to be lower for growth recovery to take place in a meaningful manner. tom: what do we report out of india? , the i think very much indian economy is a little bit weaker then modi helped. you have this uncertainty that modi -- he came in under the stitch that i will sort this out, and he has got some reforms through, but has not delivered the private sector growth people thought. most of his supporters were from

that side and it makes it difficult. he has a weak opposition running against him. views inill have more the coming weeks, particularly after the indian election. harsha subramaniam, john mickelthwait. we are able to drive the conversation forward on a global economy. fels and robber brutal -- roger bootle. bootle in the next hour. this is bloomberg. ♪

♪ tom: this morning, get used to this, this being subpar economic

growth. fels onhour, joachim the sunny rise of your new morning in america and the great european spare meant -- experiment. it is the perfect day to speak to a brexiteer about the prime minister and the biggest threat to our standing in the world, mr. corbin. roger bootle of capital economics. the democrats want to read each and every word of the mueller report. isd morning, everyone, this bloomberg "surveillance." i am tom keene with francine lacqua in london. --re is a brexit exhaustion maybe there was a snow in london yesterday -- but there is an oddity. francine: every day is different but similar in that we do not know what kind of extension the u.k. will ask for.

we do not know if no deal is taken completely off the table. theresa may is talking to jeremy corbyn and they do not like each other. if they find a compromise about the customs union, that could get voted in parliament. tom: there were more meetings between the two warring parties. the first official word on last months crash of a boeing in ethiopia, a preliminary report called on system.o review their the plane unexpectedly pitched nose-down and they were not able to repair the disaster. backed lawmakers have efforts to avoid a disorderly departure from the european union. prime minister theresa may is concerned -- and jeremy corbyn's labour party will be in talks to

find an agreement about a post brexit relationship with the e.u.. there is signs talks between the u.s. and china are in the final stages. president trump will meet with liu he. -- that whatw allow them to hold a signing ceremony. carlos ghosn was arrested again. he calls his arrest outrageous and arbitrary, and vows he will not be broken. he was free on bail for less than a month. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am sebastian salek and this is bloomberg. tom: thank you so much. quickly,the data equities, bonds, currencies, commodities. after 3, 4, five days of

a bull market. oil, suggesting $70 may be a new level with brent crude elevating against west texas. put the dollar up here. -- i put turkish lira into please francine. francine: i am very pleased. the global stocks rally we had yesterday is really losing momentum. investors are trying to figure out if the news will come out in the u.s.-china trade negotiations and some news tomorrow from d.c. the vix, always great to look at vix, 13.82. i did put euro because we had disappointed figures out of germany. british lawmakers backed efforts to avoid a disorderly departure

from the e.u., voting to block a damaging no deal brexit. between theresa may and jeremy corbyn were useful but no resolution. joining us now is roger bootle .nd joachim fels thank you both for joining us. meando brexit negotiations for world markets? it seems every day we are close to a deal, no, we are not. how do you view this. joachim: brexit may be important in the u.k. and europe, but globally, there are more important things like china and whether it is stabilizing, like the fed, what is the new inflation strategy? markets have gotten a little bit tired of brexit. there is a certain brexit

fatigue. the whole brexit debate shows the left tail for the markets is defined by politics these days, not just in the u.k. but in europe and the u.s. francine: what kind of brexit where we end up with? roger: i wish i knew. all things are possible. i do not believe that no deal is off the table. customs union is a possibility. there is a likely desh there is a likelihood of a delay with massive political policies. reinvented athat fels,illance," joachim and roger, to have you in the heat of all of this. let me go opposite the telegraph and ask who has mr. corbin's back. the labour party, i find fascinating.

within the roger: party? tom: within the party. roger: senior people and labor members are supporting him. at will be thoroughly remarkable if he has a shot at becoming prime minister because not that long ago, labour mps wanted to get rid of him because he would be supposedly annihilated by missus may. ms. may. tom: with your work as a measured voice on leave, and the last 24 hours, what is the relationship of the elites to the rest of the united kingdom? joachim: this is dangerous now. we can debate on what sort of brexit will be, delay, customs union, but we have gone beyond that because the conservative party is in open rebellion.

the u.k. takes part in the elections, the european union will do appallingly badly. there are council elections in this country as well. conservatives will do appallingly badly. we are on the brink of a historic change, revelation desh revolution. -- revolution. that do: -- how would in european elections? joachim: we have a labour party that wants a second referendum and members who want to remain. i do not think we will get a breakaway party specifically springing up in the case to remain, but we are going to get a party dedicated particularly to brexit. francine: what do you think the implications of this is for the european union?

do we know what the e.u. wants? joachim: there is fatigue and global markets and the european union for brexit. i am not sure the e.u. wants the u.k. to stay in. they wanted to be over with. the most interesting implication is that other countries who might have thought about leaving will not only think twice, but three times, four times, five times, before they exit. it may pull the e.u. closer together. tom: there is an important election in southeast wales which shows the new politics here of multiple parties. what is your study of greater europe on a nation moving from liberals and conservatives over to a multiparty system which is maybe where great britain is heading? roger: this has been -- joachim: this has been going on for a long time and i use to cover the

netherlands, which had a multiparty system and that was unique. and most of the major countries, you have 5, 6, 7 parties so you have the need for coalitions. it increases the fragmentation, the polarization. it is deepening the divides within countries because you see more and more parties going to the extremes of the political spectrum, and ed lee is the most recent example. francine: what does the u.k. economy do? joachim: it is doing -- roger: it is doing pretty well, better than much of the continent, better than germany. u.k. consumers have a way of shrugging this off. where you are seeing the brexit effect is on corporate investment. there are signs that is weaker than it would've been, and trade , exports would've been stronger.

there is some weakness attributable to brexit, but not a lot. telegraph," at "the writing for them once a week. boriss the tone that johnson must convey after the last 48 hours? advancee is fighting to his claims on the leadership. front-page massive action on "the telegraph." roger: he is not the only person to take over and my suspicion is he will not win the leadership. the fight going on for the soul of the conservative party is above and beyond brexit, it is about tax cuts, the role of the state, the position of the nationstate. we will see a massive battle in this country over the future of the conservative party, and i think it will split. francine: we will have a lot more on that, roger bootle and

joachim fels stay with us. withg up, a conversation the u.k. ambassador to the u.s. look for that at 11:00 a.m. in new york, 4:00 p.m. in london. this is bloomberg. ♪

♪ .om: good morning, everyone from london, francine lacqua and tom keene. tomorrow from italy. have onust thrilled to the set joachim fels and roger bootle. this is a two hour discussion on days of our central banks. let's talk about the basic idea that mr. cardi and mr. king are in disagreement over the effect of no deal. here are two frontline academics and men of business. mervyn king's historic work after a northern rock, important people, and boy do they disagree on the effective no deal. roger: you will know i am on the side of lord king. on the whole, he has kept pretty

quiet since he left the bank of england. he spoke out about brexit about six months ago and more recently said no deal would be perfectly ok. he clearly feels very strongly about this. i think he is right. tom: this goes to the debate of people speaking up. mr. trump speaking up yesterday. it is unprecedented to see a federal banker pushed out as alluded to. is there any possibility this could occur? joachim: you cannot rule anything out with mr. trump, but i think it is unlikely. the fed is a fairly strong institution so even if trump would take mr. powell out, you still have the board of governors, the regional fed presidents who have a say in deciding monetary policy. this is a little bit of a storm in a teacup. francine: fairly strong does not

fail me 100% with confidence. what does that mean? joachim: you have an institution with a clear track record. you have many federal reserve presidents who are not appointed by the white house, by the president. i think you have a division of power within the fed that will make this not such a big deal. francine: when you look at the fed and what they can and cannot recession,e is a deal with that? do they have the tools? joachim: they have almost 250 basis points of rate cuts to get down to the zero bound. they have shown in good times, they can run down the balance sheet a little bit so that is an argument for expanding the balance sheet. they could use other tools they have not used yet.

richard claire ptak mentioned daeld curve targeting -- clari mentioned yield curve targeting. this is something they are studying as part of their strategy review. the tool -- the fed has tools available, certainly more than the ecb. tom: i would like to interrupt for an annual event across the bloomberg world, the letter from mr. diamond of j.p. morgan, skiesdimon welding a new -- building a new skyscraper on park avenue. we see that every year, with the highlights being another strong year, the financial results of is. morgan, but mr. dimon always discussing the events of the day. francine: bring us some of the headlines. thisthe performance idea,

is clearly the number one performing bank. backdrop is what we are seeing in germany with a potential merger and the unicredit commerzbank story. he lays out principles and strategies reaffirming how j.p. morgan will move forward. in every interview, it is a technology investment they are leading with. francine: as we go through the letter jamie dimon has written to shareholders, it starts with its own bank saying he is prepared, the bank is prepared for but not predicting a recession. they prefer to use capital to .row rather than buyback that seems a dig to some of their rivals. tom: we are seeing not only a statement that mr. diamond -- dimon suggesting that share buybacks have a place in

finance. the american dream is alive but fraying for many. he must have a proper diagnosis of our problems. the issues are real and serious. the issues are all fixable but only if we set aside partisan politics. one of the joys of this letter as it is written in jamie dimon's voice, not a bunch of handlers. ceo's, your country needs you. america's global role in engagement are indispensable. begin withe, let me the idea that america's global role and engagement are indispensable. anniversary of nato, that is under test. roger: america is indispensable and this is deeply worrying. done a is that trump has lot of good things and comes

under unfair critiques, the way he has played fast and loose with international institutions is extremely dangerous. tom: this is so important, a single sentence -- ceo's, your country needs you. year,this at davos every the elite strutting around but do not want to engage in policy. "third of the summer, pillars," talking about the need for the community. what can the ceos do? joachim: they are not national figures. most of them are global figures of the large companies because they are large companies. these companies do not have a country. it is quite natural they engage less in national politics and issues because they have to look at the whole marketplace. tom: does siemens have a public duty in german -- germany to be

more verbal and aggressive in america? to dupont, do they need insert themselves more into the american conversation? .oachim: i do not think so ceo's have a duty to their shareholders. that is the division of power in the market economy. francine: preparation, not prediction, jamie dimon saying they are prepared for but not predicting a recession and they prefer to use capital to grow rather than by back -- buy bac k. are they prepared to deal with such a crisis as we saw in the lehman area -- era? roger: i do not think a recession in the states is likely, but it is a danger. the problem is always the bits you do not know about.

i am sure we will not see exactly the same thing as before. the euro zone scares me. i think the fed has got a fair amount of ammunition. it is the ecb and european question that is deeply worrying with the deposit rate negative and germany opposed to further qe. what on earth does the ecb do? tom: in his letter, he talks about something in the news, front and center in london, the future of asset management. i think you can comment on the new consolidation and this need for this dreaded word, scale. we need scale in jamie dimon's industry and asset management. it will not go away. joachim: this is a common trend that you see not only an asset management and the financial

sector but in many industries. there is a move toward scale. you need global scale to compete in this environment and we at pimco are well-positioned. the problem is for the smaller and medium-sized asset managers coming under pressure. francine: the letter is about 22, 23 pages long, our news team putting headlines out. there are concerns on china's economy, but they are legitimate but manageable. he is talking about cybersecurity, suggesting that is probably one of the biggest threats to the u.s. financial system. how do you look at china? joachim: china is hugely important. if you look at markets at the moment, china is the key driver for the global trade cycle and the global business cycle. last year when china was in a deleveraging mode and when the

trade tensions brought the chinese economy down, you saw a sharp slowdown, and we are seeing it in the data around the world. manufacturing pmi's and recession around the euro area, that can be traced back to the china slowdown. ,here is now easing in place triple easing in china, credit easing, fiscal easing, and trade tensions easing. there are signs the chinese economy is bottoming out. i think we are looking for the next, over the next three to six months you will see stabilization or a slight pickup in china which will help the global economy recover. tom: the overarching theme about this is a dominant bank. isarly throughout 23 pages the dominance of how they have done over the last 10 years. catherine man at citigroup talks

about how everything is rolling up in the larger institutions. should we fear in europe, in the united kingdom, banking men opt sity where the power of jamie dimon is to great? it is not healthy to have banking dominated by a few large players. theermany, you can see position of deutsche and commerzbank, you can understand the forces pushing them together. tom: joachim fels, you are expert on the idea of peripheral europe leaving or is it the core europe leaving as well? is it better to have a bank internal merger or a cross-border merger as suggested by unicredit and commerzbank? joachim: i think in the end, to

complete european monetary banking you need cross-border to do that. tom: i totally agree. joachim: you will need more internal consolidation. the problem is the german banking market is so fragmented so the so-called large players like deutsche's and commerce do not have the necessary scale. i do not know how this merger ends but deutsche bank and commerzbank might only be the first step toward creating pan-european banks. francine: we are just getting started. tom: roger bootle, thank you so much for joining us. joachim fels staying with us. this is bloomberg. ♪ so with xfinity mobile

i can customize each line for each family member? yup. and since it comes with your internet, you can switch wireless carriers, and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need, and still save hundreds of dollars. do you guys sell other dogs? now that's simple, easy, awesome.

customize each line by paying for data by the gig or get unlimited. and now get $250 back when you buy a new samsung galaxy. click, call, or visit a store today. francine: this is bloomberg "surveillance," tom and francine from london. facebook data is still showing up in places it shouldn't.

droves of user information is posted publicly on amazon cloud services. in one instance, they found over 500 million pieces of user data. the records were downloadable for anyone who could find them but were taken down yesterday after a few became public. when you look at this, how do regulators react? this is 500 million users data in the open. paul: this is the last thing they want. user privacy is paramount and is starting to come up on the radar of u.s. regulators. we had a lot of tech ceos hauled in front of congress and that is the last thing they want. they have enjoyed a light regulatory touch from u.s. regulators and the one area they are at risk at is data

integrity, data privacy. the more instances we see where use a dater pop up -- user data pops up where it should not be, that trains the microscope back on the tech industry. that is clearly something they want to avoid. will they be broken up -- francine: will they be broken up? paul: at this point i think it is too difficult, but people are starting to talk about it. europeans have historically regulated the u.s. technology industry with a pretty heavy hand going back to microsoft, but u.s. regulators have generally kept a light touch. i think that will not change materially, but the u.s. tech giants need to get ahead of. a bloomberg article captures the idea that if we build hardware it is not our worry. will that break down?

will we have a divide between hardware and content people, or is everybody in the same pool? paul: i think everyone is in the same pool in this article goes to the issue of who owns and is responsible for the data. is it the facebooks of the world or the cloud owners, in this particular case amazon web services where the data resided? amazon's claim and per their agreement with their users, we do not own the data, we are just storing it. that needs to be cleared up on both sides. tom: time for the dumb question of the day. paul sweeney hears this every single day. where is the cloud? where is this stuff that is the cloud? paul: it is on big server firms around the world. if you look at amazon and facebook and other tech

companies, they are investing huge amounts of money in storage. they are saying to owners of data and content, you can store your data, your content on my servers. do not worry about it. that is the cloud. me ataul sweeney joining 9:00 on bloomberg radio, smart discussion on corporate america. right now, our first word news. sebastian: a u.s.-china trade deal would give beijing until 2025 to fulfill its promises and would allow american companies to completely own businesses in china. president trump and the vice premier liu he will meet today and that is assigned talks are in the final stages. demandingare formally the irs turnover president trump's business and tax returns. the matter is most certain to end up in court.

the former vice president joe biden is trying to diffuse a problem that could hurt his presidential hopes. he addressed accusations he has made women uncomfortable with unwanted physical contact. he did not apologize but vowed to change his style. the u.s. is where earning -- warning turkey over the purchase of a defense system. mike pence says the u.s. has told turkey it is suspending shipments of f-35 fighter equipment and materials. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am sebastian salek and this is bloomberg. tom: thank you so much. to our global audience and particularly in europe, there are some nuances in washington on the mueller report. kevin cirilli is with us. i see the washington post

writing about how mueller associates are upset with the what is the you are -- the granularity with the new subpoena from mr. nadler' community? what is the threat? -- what is the sweat? kevin: ultimately, most people are assuming the entire report, more than 400 pages not including appendixes and footnotes will be delivered to congress sometime in mid april. the chairman and democrats' pressure not doing much in trying to force the issue. republicans i talk with say they are on board to having the entire report released in that at will come out in the coming weeks. we will get it by the end of the month. tom: do we have any sense within the conversations you have had

of the mystery of this, what is in the mueller report? kevin: it will be a new narrative -- not necessarily new , but precisely what went on during the campaign as well as in the early parts of the administration. the congressional committees in the democratic-controlled house are starting to issue subpoenas on a host of topics ranging from the dog ration -- inauguration to finances. from the mueller report perspective, democrats and republicans wanting to see what is in the report, everyone has been talking about it, but the timeline is mid april. francine: give me a sense of what happens to president trump's base if he has a deal with china. does that not energize them? does he lose a little bit of support because he cannot talk tough anymore? kevin: that is the political

conundrum the white house finds itself in. you want to head into the campaign trail saying you have a deal with china, given that some economists are predicting a recession, or do you want to attack china0 and and say the democrats have been a foil to get a better deal? with the vice premier in town, the talks seem to be trending positively. the hold up over enforcement mechanisms has drawn criticism from republicans and the u.s. chamber of commerce because of the signals the president has said he might keep tariffs in place to ensure china follows through with their end of the deal. tom: kevin cirilli, thank you so much. joachim fels with us. kevin cirilli mentioned the recession. what is your experience, particularly working with steve

roach and richard berger? can you call a recession, get out front and forecast a recession? joachim: i think you can, but it is tough. inemember writing a piece 2006 when the yield curve inverted called "the recession of 2007." it is possible, but usually economists do not get that right . with the fed taking a more thesh stance on rates, balance sheet, the inflation strategy, may be the recession has been pushed back a little bit. i think we have turned back the clock a little bit and we are late cycle but not as late as people thought. if we look at central banks -- francine: if we look at central banks, is it really the ecb that has the biggest problem? they could run out of tools and

the ugliest part could start in europe. joachim: the ecb is the central bank with the biggest problem because rates are negative. they have reached the self set limits for bond buying. there are a few things they could do in the next recession. they could start buying equities, but that would not do much for the economy. this is behind our medium and longer-term worries about the euro zone because if the next recession comes, we are out of tools and fiscal policy will probably be slow to react. tom: this is the actual research from pimco, and one of the great things that jacob fells, you can that joachim fels, you can see the flatlining. that "flatlining" word scares me. is america flatlining now? flatlining refers

to interest rates, not growth. we do not think the economy will flatline but interest rates will flatline or modulate. tom: are you predicting financial repression that has been part of pimco's belief four years? joachim: yes, it has been around for a long time and will be around because debt has only increased over time. we have seen last year that there are limits to rising interest rates. when interest rates rise too fast or too far, there is too much debt. central banks, the fed has arrived in the new neutral of low policy rates, so this is the future, flatlining at the new neutral. francine: that is a great way of putting it. we will have much more throughout the day. joachim fels stays with us. we will talk about jamie dimon's

letter to shareholders. tin,oke with ana bor santander's chairman yesterday. >> we have raised profitability over the last three years ago. when i arrived, only 40% of our numbers were above assets and today the number is 90%. we are managing the bank in a more disciplined way in terms of regulatory capital. we have sold and bought a lot of assets over the last three years. ♪

♪ bloomberg "surveillance," francine lacqua and tom keene counting down the hours before

we go to lake clooney in italy. francine: the embers that a form ruzetti form. tom is going around with rosetta stone to learn italian. i cannot wait. tom: she writes wonderful, thoughtful articles for bloomberg opinion. let's look at the american bank that will buy all of american banking. this is a complex letter from jamie dimon with some financial depth. we can see that he could talk about maybe the place of america within europe. headlines are real simple. talking about the excellence of his bank and the challenges doing forward, and

the american events across the globe, and all of this wrapped around european banking. banks --ean banks by buy banks in europe? why can't morgan stanley by commerzbank? >> i do not think they want to. jamie has been talking about and reiterating they can keep growing market share by adding bankers. they do not need to take on europe's troubled lenders. business is still very competitive where profitability is potentially at a.p.. -- a peak. francine: and the banking sector, germany is quite lucrative. is it a sweet spot because of the lending dynamic? elisa: you have this in

enterprises which can become arealucrative clients, the that business is attracting attention and that is what the likes of unicredit and bnp paribas would like to get their hands on. the consumer market is cutthroat and the margins are thin. that puts potential buyers to the outside. francine: when you look at the jamie dimon letter, he talks about being ready but not expecting a recession, the tax system in the u.s. is there anything that stands out? elisa: he is reiterating the concerns about cyber risk and the frothiness and the financial leverage sector, particularly nonbank exposure for that part of the market. .om: an important question steve bannon reportedly put the portrait of andrew jackson in the oval office. is identified

with mistrust of banks and yet canada with essentially five banks, the united states banks drinking down, and germany -- shrinking down, and germany is the land of little banks. does european banking need to be more like canada? joachim: i think they would, but this is a problem that is difficult to solve in germany because it is a fragmented system. you have these public-sector players, savings banks, and the cooperative banks that take a large share together with the savings banks, a large share of consumer banking. it is incredibly difficult to an -- to consolidate and that is what deutsche bank and commerzbank are struggling with. tom: what is the cultural management of the italians coming to the rescue of commerzbank? what is the cultural idea of the demand or need for cross-border

european mix? elisa: the devil is in the details and the financial times has talked about a german bank that would keep a german listing. tom: i cannot pronounce it. ask me again about my german. francine: rosetta stone. elisa: if you can keep a listing in germany, potentially that would address the concerns that commerzbank shareholders have about taking on more debt that unicredit is sitting on. it would address the structural constraints that remain to cross-border consolidation from regularization but does not allow banks to move around capital freely across jurisdictions. francine: what kind of system do we need? how many banks do we need to make their them on it -- make sure the monetary transactions

are done properly? joachim: i am not sure that matters about the amount of banks. they are channeling credit into the economy, so i do not think you can pin it down to the exact number of banks. the big issue is, how sounds are banks? how many nonperforming loans are on their balance sheet? that is something europe is still struggling with. tom: what did we learn from cross-border mergers 10 years ago, 12 years ago? what was the lesson? elisa: there needs to be order, overlaps taken out, cost-cutting, a leaner system that is fed or to deal with the technology challenge -- fitter to deal with the technology challenge. tom: greatly appreciated. i am going to run off to radio right now and begin the day with mr. ferro.

francine: talking football and fed. coming up later, stephen moore, the presumed fed nominee will join us. tom: controversial and a lot of real doubt about whether he will be a federal reserve governor. please stay with us. this is bloomberg. ♪

♪ we are moving forward and the team is very comfortable. we have had all of our team here yesterday. we now have a digital videocast of the rest of the group. we work great together and we have an amazing team working for him, so we are optimistic about the future. francine: what happens for brexit? are you ready for it? ana: we have been working for months to make sure all of our retail customers, small companies, big companies, that we are ready to service them. we are ready and they can trust

that service will continue whatever happens with brexit. francine: if there is a no deal brexit, does it impact operations in europe? ana: we have to do some adjustments, but not as much as others. the rules have been more onerous in terms of cost so we have had to move a few people but not many. youreurope -- francine: bonds,n not to have coco walk us through that decision. ana: it was the first time since the cocos were issued that the economic rationale made sense and that is what we did. we have flexibility and we will take that in the future to do it or not. we believe we did the right thing. ,rancine: that was ana botin the santander executive chair.

today is the deadline for u.k. businesses to report their gender pay gap details. reports show few signs of progress and the imbalance has actually gotten worse. >> we have been through the numbers to see how 2017 matched up against 2018. broadly speaking, it is relatively the same. one thing to look at is the bonuses from the companies who reported last night. women are getting paid last when it comes to bonuses. then we looked at the ftse 100 companies that reported and only a handful are paying women more than men -- or i should say units. ed, ftse 100sea of r companies where women are being paid less than men. hsbc is the biggest one, down 61%. francine: annmarie hordern with

the gender pay gap. tomorrow, tom and i will be coming to you from italy. we will be speaking with the farmer -- former prime minister of italy and a lot of economists. we will talk about the euro zone and the latest news coming from italy in the last two hours. italy will cut its economic growth forecast .1%. that has loads of applications for the market and the budget. investors trying to get more information on u.s.-china and the trade deal. this is bloomberg. ♪

the biggest week in television is almost here. xfinity watchathon week. starting april 8th, enjoy free access to the best shows and movies from hbo, showtime, epix and more. what! whether it's more jaw droppers, standing o's upon standing o's or tv's biggest show stoppers. get more into what you're into. get ready to watch with xfinity x1 or the xfinity stream app.

xfinity watchathon week. free starting april 8th. boop! ♪ alix: inching closer and closer. withdent trump will meet

chinese premier. unicredit on standby. reports indicate the italian bank considers a bid for commerzbank if it's merger with deutsche bank fall through. and u.s. equities had a six-month high while volatilities stay low. it is the unloved rally. david: welcome to "bloomberg daybreak." i know what they need in washington, jamie dimon. alix: he's king for a day. david: he's laid it all out in his letter. it's his own bank, but he goes well beyond that bank. alix: it was a little bit like he was running for president. this is how i would fix everything. about now let me tell you the banking system, about washington, about the world. alix: pretty much.